“Nonfarm employment increased by 146,000 in June, and the unemployment rate continued to trend down, reaching 5.0 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Over the month, payroll employment continued to grow in several industries, notably professional and business services and health care.”
Consensus estimates were between 178-200, so today’s number is weaker than expected.
As usual, manufacturing lost jobs. This time the number was 24,000. The big gains were in service sector jobs, specifically professional and business services which gained 56,000.
So what does this mean? Bloomberg’s story has the best answer: “Slowly but surely the job market is improving, but it’s an achingly slow process in the expansion,” said Doug Porter, an economist with BMO Nesbitt Burns in Toronto, before the report.
Simply put, this expansion is not creating the level of jobs it should. For a variety of reasons, employers are holding back on hiring decisions. There are numerous reasons for this. Often sited are health insurance costs for new employees. In addition, corporations are doing a fair amount of pure savings right now, possibly looking for investment opportunities, possible just simply saving because it is the economic path of least resistance.
ftp://ftp.bls.gov/pub/news.release/empsit.txt
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aW6yJzGBonBw&refer=home
